USED Motor Vehicle Dealer ($25,000) Bond - Statewide in North Dakota
Table of Contents
Brief Summary
The $25,000 bond gets a used dealer licensed in North Dakota, but it will not keep the license on its own. The state will not renew a dealer that made fewer than eight retail sales the previous year. Getting the bond on the right NDDOT form, SFN 2933, is the easy part of the application, so it should never be what holds up your license.
Every applicant for a North Dakota used motor vehicle dealer license must file a continuous $25,000 surety bond with the Department of Transportation before the license is issued, under NDCC 39-22-05. The same $25,000 applies to new motor vehicle dealers. The bond runs to the State of North Dakota and protects anyone who does business with the dealer, including against failure to deliver a valid certificate of title. Licenses expire December 31 each year.
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How to Apply for a USED Motor Vehicle Dealer ($25,000) Bond:
- Secure an established place of business with an enclosed building of at least 250 square feet next to a display lot.
- Have the surety execute the $25,000 Motor Vehicle Dealer Bond on SFN 2933.
- Complete the Application for Dealer's License, SFN 2932, and attach the bond and proof of garage liability insurance.
- Pay the $100 license fee and the nonrefundable $100 initial inspection fee.
- Allow 4 to 6 weeks for the NDDOT inspection before the license is issued.
- Renew before December 31 each year and keep at least eight retail sales per year.
Detailed Information About the North Dakota USED Motor Vehicle Dealer ($25,000) Bond:
Renewal depends on sales, not just the bond
NDCC 39-22-18 says a dealer license expires on December 31 each year, and the department may not renew the license of an applicant who made fewer than eight retail motor vehicle sales during the previous year. Retail sales here means sales of motor vehicles that require titling and registration to be driven on the road. A dealer that files the renewal after the license has expired pays an extra $100 on top of the usual fees.
What the bond guarantees
NDCC 39-22-05 requires a continuous surety bond of $25,000, written by a surety company licensed and qualified to do business in North Dakota and running to the State of North Dakota. The bond guarantees that the dealer will comply with the state laws that regulate dealers, and it indemnifies any person dealing with the dealer for loss caused by the dealer's failure to comply, including failure to furnish a proper and valid certificate of title. A person who is harmed can proceed against the dealer and the surety without making the state a party. The surety's aggregate liability to all claimants cannot exceed $25,000.
The surety can cancel for future liability by certified mail to the dealer and the department. The bond is void as to new liability 30 days after the notice is mailed.
License fees and place of business
The dealer license fee is $100 per year and includes one dealer plate. Additional plates are $20 each. A first time new or used dealer applicant also pays a nonrefundable $100 fee for the initial inspection. A used motor vehicle dealer license allows the holder to deal in used motor vehicles only.
Before a license is issued, the applicant must show an established place of business in North Dakota next to the primary display lot. That means a permanent enclosed building of at least 250 square feet, owned, rented or leased, and the business and primary display lot must cover at least 2,500 square feet. The application, SFN 2932, also asks for proof of garage liability insurance. NDDOT asks applicants to allow 4 to 6 weeks for the inspection before the license is issued.
Forms
The bond is filed on the Motor Vehicle Dealer Bond, SFN 2933, with the Application for Dealer's License, SFN 2932, to the North Dakota Department of Transportation, Motor Vehicle Division, 608 E Boulevard Ave, Bismarck, ND 58505-0780.
Eligibility and Requirements for a North Dakota USED Motor Vehicle Dealer ($25,000) Bond:
- Continuous surety bond of $25,000 under NDCC 39-22-05.
- State of North Dakota named as obligee.
- Surety company licensed and qualified to do business in North Dakota.
- Bond filed with the department before the license is issued.
- At least eight retail motor vehicle sales in the prior year to qualify for renewal.
North Dakota USED Motor Vehicle Dealer ($25,000) Bond FAQs:
No. NDCC 39-22-05 sets one amount, $25,000, for motor vehicle dealers, and NDDOT uses the same Motor Vehicle Dealer Bond form, SFN 2933.
No. Under NDCC 39-22-18 the department may not renew a dealer license if the dealer made fewer than eight retail motor vehicle sales during the previous year.
Any person who deals with the dealer in connection with a motor vehicle and suffers loss because the dealer failed to follow North Dakota law, including failure to deliver a valid certificate of title. The claimant can proceed against the dealer and surety directly, and total liability is capped at $25,000.
Every dealer license expires December 31. A dealer that files the renewal after the license expires pays a $100 late fee in addition to the regular fees.
By certified mail to the dealer and the department. The bond stops covering new liability 30 days after the notice is mailed, and the surety stays liable for anything arising before that date.
